UK Natgas Prices Rise Further as Middle East Hostilities Continue

UK natural gas prices surged to 194 pence per therm on Wednesday, marking a fourth consecutive day of increases and reaching their highest level since December 2022. This sharp rise comes as ongoing strikes in the Middle East continue to fuel concerns over potential further supply disruptions. In a show of force, the US military claimed to have destroyed five Iranian oil tankers near Kharg Island on Tuesday, following attacks on its warships.

Tehran responded by targeting US interests in Jordan. Meanwhile, Iran-backed Houthi rebels in Yemen unleashed drones and missiles on energy infrastructure in southern Saudi Arabia, further compounding the challenges to restoring normal traffic through the Strait of Hormuz. These persistent disruptions have compelled Qatar to suspend shipments and extend force majeure on cargoes destined for Europe and Asia through autumn.

The reduced liquefied natural gas (LNG) deliveries have hindered European storage injections, with gas inventories still lagging behind the seasonal average. As the winter heating season looms, the market faces increased vulnerability due to these ongoing supply constraints. The situation is monitored closely by Trading Economics.